Keppel

Keppel: CLSA is positive on the jackup market in 2014 from strong demand for high spec jackups in Middle East and Mexican market, coupled with replacement demand driving order flow. A heavy jackup orderbook implies healthy low-mid teens margin for the O&M segment. CLSA expects another jackup 40-50 orders for 2014. CLSA also believes that FLNG (costing about US$600-700m) has the long term potential to drive orders for Keppel, in light of multiple stranded gas opportunities in North America, West Africa, and Asia Pac. The house expects US$5.75b order wins in 2014 driven by new jackup and FLNG orders. Keppel presently already has 12 jackup rigs commitments with Pemex, and Golar has indicated interest of building 3-6 FLNG vessels with Keppel. CLSA upgrades from Hold to Buy, with increased TP of $12.40 from $12.00